The success and use of economic sanctions

Abstract

This paper explains the use and the success of economic sanctions. In the model, a sender, nation A, uses sanctions to force a target, nation B, to alter its current policy. I use a continuous time, one sided incomplete information game to show that the decision of the sender to sanction is related to the decision of the target to resist I characterize the conditions under which sanctions occur, the conditions under which the sender threatens sanctions and the conditions under which sanctions are successful. The analysis reveals that the success of sanctions affects whether a nation chooses to sanction. I discuss how the implications of this result relates to the cases of sanctions that we empirically observe.